Money changes everything – unless it doesn't

Wage & Hour

The Missouri legislature passed HB 1194, a bill that overturns the St. Louis minimum wage increase of $10 effective May 5, 2017, and $11 effective January 1, 2018. The law also blocks Kansas City from increasing its minimum wage. The governor is expected to sign off on the measure.

According to the bill language, the bill preempts and nullifies all political subdivision ordinances, rules, and regulations currently in effect or later enacted relating to the establishment or enforcement of a minimum or living wage or the provision of employment benefits (i.e., paid sick leave) that exceed state laws, rules, or regulations.

An emergency clause in the bill that would have made the law effective immediately was defeated prior to passage. As a result, the bill would be effective August 28, 2017, if enacted.

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A federal judge in Texas has issued a nationwide order preventing the U.S. Department of Labor from increasing the “white collar” exemption salary minimum to $913 per week December 1. This order remains in effect until the court case filed by multiple states and jurisdictions goes to trial.

In New Jersey, the Governor has eliminated the earlier action on Pennsylvania residents. You’ll remember that we previously reported on the cancellation of one portion of the reciprocal agreement between the states.

The Governor’s action resumes the current practice of allowing cross-state withholding. Pennsylvania residents working in New Jersey can continue to have Pennsylvania income tax withheld from their pay, while New Jersey residents working in Pennsylvania can continue to have New Jersey tax withheld from their Pennsylvania income.

The reason for the about face? New Jersey was able to negotiate a better pharmacy plan for their health care plans, thereby saving enough money to allow the reciprocity to continue.

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Navigating state law changes can be tricky and often results in employers not being in compliance with new regulations. Small businesses can unknowingly be out of compliance if they fail to understand all aspects of newly enacted laws. This could be the case with California’s Senate Bill (“SB”) 3. Signed by Governor Brown on April…

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The Attorney General of New York, Eric Schneiderman, has filed a wage-theft lawsuit against Domino’s Pizza. The suit alleges that the computer system used by the franchiser consistently undercounted hours worked by employees, thereby cheating employees of earned pay.

Since 2011, Mr. Schneiderman has secured more than $26 million for almost 20,000 workers who were bilked of wages. But unlike past cases, this one directly targets the corporate franchiser. If the state wins, Mr. Schneiderman hopes the case sets a precedent that makes it harder for corporations that run franchise businesses to avoid responsibility for the actions taken by the stores under their corporate umbrella.

“Wage theft is an epidemic causing harm to low-wage workers struggling to support their families every single day,” Mr. Schneiderman said in a statement.

A new twist in this case is that Attorney General Schneiderman has sued Domino’s Pizza L.L.C., instead of individual franchise owners. The suit alleges that the franchisees were forced to use the accounting system even though they were aware that it was flawed.

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Please review the following carefully. If you pay exempt and non-exempt employees, this affects you directly. The salary threshold for paying overtime has been shifted upward.

This is excerpted from the American Payroll Association’s Compliance Update of May 18, 2016:

Today, the U.S. Department of Labor released the final rules governing which executive, administrative, and professional employees (white collar workers) are exempt from the Fair Labor Standards Act’s minimum wage and overtime pay protections. The DOL last updated these regulations in 2004.

EffectiveDecember 1, 2016, the final rule raises the salary threshold to $913 a week or $47,476 a year (up from $455 a week or $23,660 a year).

The final rule focuses primarily on the salary and compensation levels needed for white collar workers to be exempt. Specifically, the rule:

• Sets the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers in the lowest-wage Census Region (currently the South).

• Increases the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers, or $134,004 (up from $100,000).

• Establishes a mechanism for automatically updating the salary and compensation levels going forward. Future automatic updates to the thresholds will occur every three years, beginning on January 1, 2020.

• Allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary level. The amounts must be paid on a quarterly or more frequent basis, but there is a provision allowing a “catch-up” payment to be made during the first pay period of the next quarter.

• Does not change any of the existing job duty requirements to qualify for an exemption. Both the standard duties tests and the HCE duties test remain unchanged. The final rule, which is scheduled to be published in the Federal Register onMay 23, is available forpreview. Additional information is available on the DOL’swebsite.

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Update: The US Labor Department has issued a regulation that most salaried workers must get time-and-a-half overtime pay if they earn up to $47,476 a year and work over 40 hours a week. The ruling goes into effect December 1, 2016. The new regulation may change the way you classify employees, and Justworks is here to help. We’ll have a blog…

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Startups are natural rule breakers. You’ve got to ruffle a few feathers and disrupt the status quo if you want to build the next Facebook. But there’s one area where startups definitely don’t want to break the rules: payroll and HR. Startups that don’t comply with payroll and HR laws can face serious legal and…